Publishers have faced an unprecedented series of disruptions recently. First, desktop and mobile web publishers were disrupted with the elimination of third-party cookies by Apple’s Safari, Firefox, and finally Google’s announcement that Chrome will retire third-party cookies in 2021. With Apple’s announcement of iOS 14 at WWDC on June 22nd, mobile publishers will now have to deal with a less prevalent IDFA in the short term. In all likelihood, Google will follow suit in some manner in the coming year, and further, we are anticipating more aggressive steps towards formal deprecation.
With iOS 14, Apple will mask the IDFA by explicit opt-in (see below) instead of the current limited ad tracking (LAT) opt-out.
While the IDFA will be lower for ad monetization/targeting/measurement, it is not disappearing. From our point of view, there are two major challenges facing publishers, both of which stem from a critical question: what will opt-in rates be?:
- Ad Monetization
- Growth Marketing
I will tackle both challenges based on how we currently understand the implementation of iOS 14, but with the usual caveat that all things could change in three months as Apple has previously “previewed” features at WWDC that don’t make their way into production releases.
The IDFA is crucial to monetization for mobile publishers because it provides a user-resettable, privacy-centric, and unique identifier that’s persistent across apps, thereby enabling publishers to achieve higher eCPMs on ad inventory by making fragmented ad-inventory targetable and measurable by brands. Many consumer apps we use every day (e.g., weather apps, games, social media, news) are free to the consumer and supported through some combination of advertising (largely programmatic these days), subscription, or in-app purchase.
As we’ve polled the industry, the estimated impact of iOS 14 is that it would decrease eCPMs on “IDFA-less” ad inventory by as much as 50% – overnight. This would have a disastrous impact on many of the mobile apps we love and use every day, which rely on advertising to fund their content, news, games, and/or other services.
It’s our belief that we will see a shift among mobile publishers to “incentivize” users to opt in to share their IDFAs and associated data with the app and receive a richer, more robust experience in return. There will be some apps where this added value will be clear and tangible (e.g., “I want my Uber to pick me up where I am and not 10 blocks from me” or “I want my pizza delivered to my house but not my neighbor’s.”). However, we believe there will be other apps that use the experience before the Apple iOS “consent to sharing” window, as well as in the window itself, to explain to the consumer why selecting “allow” matters.
How mobile apps will do this will vary. Some will include a “note from our founder” on the importance of the revenue generated by the app, while others may implement completely separate tiers of experience – “Pay $4.99 per month or select ‘allow sharing’ to access our content.” It’s our understanding that since this is not a CCPA- or GDPR- related “consent” signal, as long as the differentiation is roughly equal to the value derived from sharing, publishers will have every right to build this dual experience.
Clearly, once an app has users, there is a challenge to monetize those consumers. However, IDFA deprecation poses an even potentially greater threat to acquiring those customers in the first place.
Generally speaking, most mobile app publishers are performance marketers, optimizing for ROAS across all challenges with a heavy emphasis on Facebook, Google, and programmatic (absent keyword targeting on App Stores). By definition, this means they’re always optimizing for the right KPI – CPI, ROAS in the first seven days, etc. To effectively “attribute” what channel each download, install, etc., originated from, all platforms rely heavily on the IDFA or AAID.
Should the IDFA be deprecated or increasingly limited, growth marketers will struggle with:
- Re-targeting users, as this is heavily reliant on the IDFA
- Building effective lookalike models on Facebook, Google UAC, etc.
- Understanding which channels are providing the highest performance so they can optimize their media spend.
The core of the issue relies on device-wide anonymous identity; i.e., the ability to (and as always, consented to by the consumer) understand an anonymous individual across the ecosystem. Many companies, including TrueData, are exploring how to build solutions for publishers to cope with these challenges and enable growth marketers to succeed.
From our point of view, challenges create opportunities. We feel the Apple shifts are aligned with our continuing goal of supporting consented user experiences and transparency in the ecosystem. We look forward to continuing to work with our mobile app publishers to solve problems and drive innovation forward.